Should I start my annuity or roll it over.

Depends on your age, if you need the income, if your annuity is non-qualified (funded with after-tax dollars) or not. If not, rolling it into a 401(k) isn’t allowed under IRS rules.

Doing it:

Pros: Provides a predictable income stream, often for life. It offers financial stability without concern for market fluctuations.

Cons: Payments are taxed as ordinary income. Once annuitized, the money is typically inaccessible, and changing your mind afterward is not an option. You'd get an annual payout (or monthly), but you can't get the principal. If you pass away early, the remaining funds may not transfer to your heirs unless a rider is included. See if there's a "Death Benefit".

A "GMIB rider for 6%" is pretty good (that guarantees you a minimum level of income in retirement, no matter how the market performs). Can you just keep it in the annuity and let that continue to grow?


Good Article

quote:

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Very good advice, thanks.

The annuity is paid with pre-tax dollars, so I can roll it into the 401(k) if that makes sense.

And yes, I can just keep the finds in the annuity without doing anything. I don't need the funds now.

I guess the real question is this. If I roll the annuity over I can get 4.5+ on those funds in a secure investment. I can't tell if I would be doing better to keep the funds in the annuity.

Again, much thanks

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I'm actually going through the same exercise as we speak. We have 3 annuities we're evaluating "switching on". Similar "GMIB rider for 6%".

These are a fairly small portion of our overall portfolio. We bought them years ago because we'd been investing in IRAs and 401ks for years religiously. Rolled those over about 10 years ago. Then, continued to invest in the IRAs and 401ks as usual, just a "big chunk" of those monies were in the annuities and they'd produce an indexed guaranteed payment per year which went up by the GMIB (My Prudential one is a daily calculation).

I look at it this way..

Average US Male dies at 76. Maybe we last longer. Maybe we don't.

At this point, they have your money. Sure, there's probably a sizeable "Death Benefit", but that doesn't help you right now. I'd rather play with my own money at this point than let them keep it (if I need it). I have other real and non-retirement assets to "play with" in the market.

BUT..

One caveat we're working through right now...

"IRMAA",a surcharge added to your Medicare Part B and Medicare Part D prescription drug coverage premiums if your income is over certain thresholds.

What Is It?

Income Thresholds for 2025
For 2025, IRMAA applies as follows based on your income reported from 2023:

Individuals: Over $106,000
Married couples filing jointly: Over $212,000

The amount of the surcharge varies based on income brackets. For instance, if you fall between the thresholds of $106,001 and $133,000, you'll pay an additional $74 monthly surcharge on your Part B premium, which for 2025 is set at $185 as the standard premium.

Assume you're on Medicare. We sold some property last year and it bumped us over the threshold. Our Medicare EACH went up ~$700/month.

What You Need To Know

Point is be aware of your total annual income (which includes things like Social Security).

you are paying ~4% annually on the '112k' benefit base in fees which works out to about 5.6% on your 80k cash value

You mentioned 'taking annuity payments' - are you annuitizing or withdrawing the 6% 'rollup' that Brighthouse credits to the 'benefit base' annually?

if its the latter, you are just withdrawing your money.